S&P raises Tele Columbus ratings

S&P said it raised its ratings on Tele Columbus AG and its senior secured term loan to CCC+ from D.

“TC has improved its debt maturity profile and its short-term liquidity position. The company has completed its debt restructuring by amending some terms and conditions, extending its senior secured notes and term loan maturities to 2029, and capitalizing the coupon on the notes and most of the interest payments on its term loan going forward,” S&P said in a statement.

TC’s ultimate parent Kublai GMBH agreed to inject a total of €300 million in equity in two tranches. The first €180 million tranche has been provided at closing and partially used to repay previous debt. The second €120 million tranche is expected to be available within 12 months. As a result, TC will have around €220 million in available liquidity and will not have mandatory debt repayment needs in the coming years.

“We continue to view TC's capital structure as unsustainable. Despite the restructuring, the company maintains a substantial debt load. The restructuring increased the coupon of its €650 million May 2025 secured notes to 10% payment-in-kind (PIK) and the €462 million October 2024 term loan to E+4% with a 6% floor for the loan, mostly PIK. These will increase TC's debt, further increasing its already high leverage,” S&P said.

The outlook is negative.

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